3 best investment schemes for senior citizens

Know all the details about the 3 best investment schemes for senior citizens that can help them grow their money and earn a regular income.
4 min
15 Oct 2022

3 best investment schemes for senior citizens

Wealth is not built overnight and investing it in the wrong instrument at the wrong time can be detrimental to one's life savings and investment portfolio. Citizens over 60 usually have a sizeable chunk of savings accumulated over the years. Investing this hard-earned money in a sound financial tool is a wise decision. It can help senior citizens safeguard their golden years by creating a sizeable retirement fund. Various stable and secure investment tools with steady returns are available in the market.

Here is a lowdown on 3 safe investment options for senior citizens.

Fixed Deposit

A fixed deposit is an extremely low-risk, stable tool wherein investors can be certain that their money is safe and will grow steadily over time. The FD is one of the senior citizens' most preferred investment avenues. Various financiers provide FD, but a fixed deposit from an NBFC like Bajaj Finance will safeguard your savings and get you significantly higher returns. Here is why:

1. High FD interest rates

Bajaj Finance online fixed deposit offers one of the highest FD rates in India. Senior citizens get an additional rate benefit of up to 0.25% p.a. over and above the base rates. Making it a great option to grow your savings. You can earn up to 8.60% p.a. on your deposit.

To understand how this works, consider investing Rs. 10,00,000 as an initial deposit amount for 44 months in a Bajaj Finance FD. Here is a tabular representation of returns at maturity for senior citizens.

Investor profile

Tenure

Interest rate

Maturity value

Senior citizen

44 months

up to 8.60%

Rs. 13,53,244


As the table suggests, one can earn up to Rs. 13,53,244 in just 44 months.

2. Periodic payout option

By choosing the non-cumulative FD option with Bajaj Finance, investors can get periodic payouts instead of a lump sum at maturity. You can also choose the frequency of the payouts. You can get them monthly, or quarterly, half-yearly, or even annually. These periodic payouts can help in funding your regular expenses post-retirement.

Apart from this, you also get another suite of benefits like a loan against the FD facility. When faced with an emergency, you might need liquid cash, Bajaj Finance allows you to access liquidity easily just when you need it.

Invest in a Fixed Deposit

Systematic Deposit Plan

The Systematic Deposit Plan (SDP) offered by Bajaj Finance is like a mix of a SIP and FD. You can make small monthly deposits instead of banking in a large corpus just like a SIP works. For each monthly deposit, you make books as a separate FD and the ongoing interest rate applies to each deposit you make. You can start investing with a deposit amount as low as Rs. 5,000 per month. The Systematic Deposit Plan (SDP) has two variants, the Single Maturity Scheme (SMS) and the Monthly Maturity Scheme (MMS). The difference between these two is the payout frequency. You can calculate your earnings even before investing using the Monthly Maturity Scheme calculator and the Single Maturity Scheme calculator.

Key features of SDP

  1. Minimum deposit amount of Rs. 5,000 per month
  2. Attractive interest rates go up to 8.60% p.a.
  3. Decide to invest in flexible tenure between 12 to 60 months.
  4. Choose to make multiple deposits from 6 to 48.
  5. Latest interest rates applicable on each fresh deposit
  6. End-to-end online investment

You can invest in a Bajaj Finance online SDP without worrying about returns, defaults, or untimely interest payouts as they have been accredited with the highest credit rating of CRISIL AAA/STABLE and [ICRA]AAA(Stable).
Invest in an SDP

Mutual Funds

It is a mid-risk option that can give generous returns. A mutual fund is a collective investment where multiple investors invest in a company's stocks or bonds. It is done to earn the highest possible returns while mitigating risks. The risk factor depends on the type of stocks or bonds you invest in. The safest fun category among equity funds is Index funds, whereas gilt funds are the safest among the debt categories. A professional fund manager manages the fund.

The key features of Mutual Funds. 

  • A good option for investors with all risk appetites
  • High returns as it is a market-linked option
  • Convenient investment tool

Retirement planning is an extremely important and strategic task. It requires the investor to consider various factors like risks, returns, convenience, and more. Considering all this, it is safe to say that these 3 instruments are strong contenders as ideal investment options for senior citizens.

Invest in Mutual Funds

Conclusion

It is also important to remember that there is no one-size-fits-all answer to the question of which investment scheme is the best for senior citizens. The best investment scheme for you will depend on your individual circumstances, such as your age, income, and risk tolerance. By carefully considering the factors mentioned above, you can reduce the risk involved in your investment and increase your chances of success.

Frequently asked questions

What is the minimum age to invest in senior citizen schemes?

The minimum age to invest in senior citizen schemes varies depending on the scheme. Here are some of the most popular senior citizen schemes and their minimum age requirements:

  • Bajaj Finance Fixed Deposit: All individuals over the age of 18 can book a fixed deposit with Bajaj Finance. It offers higher FD rates all customers. Senior citizens get additional rate benefit of up to 0.25% p.a.
  • Mutual Funds: The minimum age to invest in mutual funds in India on one's account is 18 years. There is no specification for a maximum age to invest your money in mutual funds in India.
  • Senior Citizen Savings Scheme (SCSS): The minimum age to invest in the SCSS is 60 years.
  • Post office Monthly Income Scheme (POMIS): The minimum age to invest in the POMIS is 55 years.
  • Public Provident Fund (PPF): The minimum age to invest in the PPF is 18 years. However, senior citizens (60 years and above) can open a PPF account in their own name and in the name of their spouse.
  • Employees' Provident Fund (EPF): The minimum age to invest in the EPF is 18 years. However, senior citizens (60 years and above) can withdraw their entire EPF balance without any penalty.
How much interest can be earned on senior citizen schemes?

The interest rate on senior citizen schemes varies depending on the scheme and the tenure of the investment. Here are some of the most popular senior citizen schemes and their current interest rates:

Fixed deposit: The interest rates for Bajaj Finance Fixed Deposits (FDs) vary depending on the tenure of the investment and whether you are a senior citizen or not. For non-senior citizens, the interest rates range from 7.16% to 8.35% per annum. While for senior citizens, the interest rates range from 7.39% to 8.60% per annum. The minimum deposit amount for a Bajaj Finance FD is Rs. 15,000 and the maximum deposit amount is Rs. 5 crore. You can open a Bajaj Finance FD online or at any of their branches.

Systematic Deposit Plan: The interest rates for Bajaj Finance Systematic Deposit Plan (SDP) vary depending on the tenure of the investment and whether you are a senior citizen or not. For non-senior citizens, the interest rates range from 7.16% to 8.35% per annum. While for senior citizens, the interest rates range from 7.39% to 8.60% per annum. The minimum deposit amount for a Bajaj Finance SDP is Rs. 5,000 and the maximum deposit amount is Rs. 5 crore. You can open a Bajaj Finance SDP online or at any of their branches.

Mutual Funds: Mutual funds do not offer fixed interest rates. Instead, they offer the potential for capital appreciation and dividend income. The actual returns that you earn from a mutual fund will depend on the performance of the underlying investments. The returns from mutual funds can vary widely depending on the type of fund, the market conditions, and the time period you invest.

It is important to note that these are just a few of the most popular senior citizen schemes. There are many other schemes available, and the interest rates may vary.

How to build wealth in your 60s?

Building wealth in your 60s can be a challenge, but it is possible with careful planning and execution. Here are a few tips:

  • Start by assessing your current financial situation. How much money do you have saved? What are your monthly expenses? Once you have a good understanding of your finances, you can start to develop a plan to build wealth.
  • Make sure you are taking advantage of all of the available resources. There are a number of government programs and private initiatives that can help you save for retirement. Do some research to see what is available to you.
  • Consider working part time or starting a side hustle. Even if you are retired, you may be able to generate some additional income by working part time or starting a side hustle. This extra income can be used to save for retirement or to supplement your income.
  • Invest wisely. When you invest, you are essentially putting your money to work for you. Choose investments that are appropriate for your risk tolerance and investment goals.
  • Rebalance your portfolio regularly. As you get closer to retirement, you will need to adjust your portfolio to become more conservative. This will help to protect your money from market volatility.
  • Get professional help. A financial adviser can help you create a retirement plan that meets your unique needs and goals.

Building wealth in your 60s is not easy, but it is possible with careful planning and execution. By following these tips, you can increase your chances of success.

Can I start investing post 60?

Yes, you can start investing post 60. There are multiple investment options available for you. One of them is Bajaj Finance Fixed Deposit. Bajaj Finance offers fixed deposits (FDs) for senior citizens. These FDs offer a higher interest rate than regular FDs, which can help senior citizens to earn more on their savings.

Here are some of the benefits of investing in a Bajaj Finance FD for senior citizens:

  • Higher interest rates: Bajaj Finance FDs for senior citizens offer a higher interest rate than regular FDs. This means that senior citizens can earn more on their savings.
  • Flexible tenures: Bajaj Finance offers a variety of tenures for FDs, from 1 year to 10 years. This allows senior citizens to choose a tenure that meets their needs.
  • Easy withdrawal: Bajaj Finance allows senior citizens to withdraw their money from their FDs at any time without any penalty. This gives senior citizens the flexibility to access their money when they need it.
  • Safe and secure: Bajaj Finance is a well-known and respected financial institution. This means that senior citizens can be confident that their money is safe and secure with Bajaj Finance.

If you are a senior citizen looking for a safe and secure investment option that offers a higher interest rate, then you may want to consider investing in a Bajaj Finance FD.

Show More Show Less

Related Videos